PHILADELPHIA—Focusing on developing an effective therapy for 22q11.2 Deletion Syndrome (22q11DS),
a rare neurogenetic disorder affecting adolescents, Medgenics Inc. has acquired neuroFix
Therapeutics LLC and its “bull’s-eye targeted therapy” NFC-1. The acquisition is said to be a game-changer for speeding up the pace of
diagnosing—and treating—rare orphan diseases.

Access to this genetic information in the CAG biobank has enabled CHOP and Medgenics researchers to
work rapidly and efficiently to identify new rare and orphan disease targets to accelerate the development of novel therapies, the company states. By
focusing on the underlying genetic pathway of pediatric disease, Medgenics says it is changing the way diseases are diagnosed and treated.

Medgenics acquired all outstanding shares of neuroFix for upfront consideration of $2 million cash, a $6-million payment
split between cash and equity triggered by the recent fundraising activities, performance-based milestone payments and sales royalties, according to Mike
Cola, CEO of Medgenics. With this acquisition, Medgenics will own all development and marketing rights for NFC-1.

The key takeaway for Medgenics was sealing the deal for NFC-1, a non-stimulant metabotropic glutamate receptor (mGluR) neuromodulator. NFC-1 is
entering Phase 2/3 development for the treatment of mGluR network mutation-positive attention deficit hyperactivity disorder (ADHD) as well as
neuropsychiatric symptoms resulting from 22q11DS, which leads to a wide range of medical, psychiatric and behavioral abnormalities. The initial study results
showed improvements in multiple neurobehavioral symptoms including inattention, hyperactivity, anxiety and mood changes.

“This acquisition represents the first of a pipeline of opportunities resulting from our collaboration with the Center for Applied
Genomics,” noted Cola in a news release. “Additionally, it expands our company focus beyond gene therapy to broader genomic capabilities,
allowing us to identify and treat pediatric patients with serious, unmet medical needs.”

NFC-1 is the
“first clinical program that embodies the company’s vision—it represents the first of what we hope to be many future programs coming out of
a pipeline of potential programs from the CHOP collaboration,” Cola tells DDNews. “While this program is focused on CNS [central nervous
system] indications, our strategy is largely agnostic to therapeutic area, and will focus on bringing forward future programs that target highly specific
populations where a clear genetic signal is evident, and where we believe we can identify a therapy specifically suited to treating that
condition.”

The CAG biobank is home to more than 60,000 pediatric and 150,000 related adult patients, all of
whom are genotyped via genome-wide association studies, with associated longitudinal electronic medical records since 2006, Cola says.

“The biorepository is a fully automated, robotic facility, and the CAG includes the capability for next-generation
sequencing with fully integrated bioinformatics as well,” Cola notes. “Lastly, approximately 85 percent of the patients included in the biobank
are consented for longitudinal follow-up and are eligible for callback for future studies”.

Two programs are
being initiated immediately.

The first is a Phase 2/3 trial in mGluR+ ADHD (severe ADHD patients testing positive
for the Tier 1 or Tier 2 mGluR network mutations). The formal Phase 2/3 trial will be initiated as soon as possible (likely the first quarter of 2016), with
initial top-line data expected in the second half of 2016 (likely the fourth quarter). This trial will be designed to serve as a pivotal trial.

Second is an open-label Phase 1/2 indication and dose-finding trial specifically for the orphan disease 22q11DS. Medgenics
will likely initiate the study in early 2016, with initial top-line data expected in mid-2016, Cola says.

“We will be looking for signals in several major disorders within the 22Q population: ADHD, anxiety and mood,” according to Cola.
“Once the data from the open-label trial are evaluated, we will look to transition the program into pivotal studies in one or more of those
disorders.”

22q11DS affects one in 4,000 live births, and the disorder is a highly variable condition
impacting multiple organ systems. Medical problems can include congenital heart disease, palatal abnormalities, immunodeficiency and low calcium
levels—also, borderline intellectual impairment (IQ 70–84) and learning disabilities are common as is the development of several psychiatric
disorders.

ADHD, autism spectrum disorder (ASD) and anxiety disorder may manifest in childhood, with mood
disorders, psychotic disorders and schizophrenia seen more commonly in adolescence and young adulthood, Cola notes. Ninety percent of 22q11DS patients have
at least one mGluR network mutation.

“There is no cure for 22q11DS, and treatment focuses on addressing the
individual manifestations,” Cola points out.

Increasing evidence from animal models, pharmacology and
genetic studies reveals metabotropic glutamate receptors (mGluRs) are widely expressed in the CNS and play critical roles in regulating neuronal function,
especially in relation to neurological/ neuropsychiatric disorders including ADHD, ASD and anxiety.

Cola also
commented on the NFC-1 trial—the 30-patient Phase 1b study in adolescents with ADHD and disruptions in the mGluR)gene network. The objectives of the
study were to evaluate the safety, tolerability and pharmacokinetics of NFC-1 and to evaluate the effect of NFC-1 on ADHD during four weeks of continuous
treatment following one week of placebo therapy. NFC-1 was well tolerated, with no treatment-related serious adverse events reported.

The treatment effect of NFC-1 appeared more robust over time and at higher doses, according to Cola. Additionally, 20 of the
30 enrolled patients elected to continue in a long-term safety trial in order to maintain access to therapy.

“In the NFC-1 study we observed improvement not only in ADHD symptoms, including inattention and hyperactivity, but also in other
neurobehavioral symptoms including anxiety, mood and sleep disturbance,” said the principal investigator for the study, Dr. Josephine Elia of the
Neuroscience Center in the Department of Child and Adolescent Psychiatry at Nemours/Alfred I. duPont Hospital for Children. “These results are meaningful for patients and their families and the data suggest a compelling
clinical profile for NFC-1 for these impairing comorbidities.”

NFC-1 also has the potential to help the
thousands of patients around the world with 22q11DS, she said.

“Surgery can correct the structural
abnormalities, such as congenital heart disease and palatal abnormalities, in many of these patients,” stated Donna M. McDonald-McGinn, associate
director of Clinical Genetics and program director of the 22q and You Center at CHOP. “In contrast, existing therapeutic options for these
neuropsychiatric disorders are often inadequate in their effectiveness and may cause unwanted side effects. The discovery that disruptions in the mGluR
network underlie these disorders and the promise of NFC-1 to treat them provides new hope for these patients and their families.”

Dr. Garry Neil, chief scientific officer of Medgenics, stated: “We are elated to have the opportunity to move NFC-1
into Phase 2/3 development. The science underlying this new program allows us to identify the patients who can benefit most with high
specificity.”